Comcast adds video customers, fourth-quarter revenue rises
Comcast posted higher fourth-quarter revenue on Tuesday, raised its dividend and authorized a new share repurchase program, sparking a 3 percent jump in its shares in premarket trading.
The largest U.S. cable provider added quarterly cable video subscribers for the first time in more than six years, helping to more than offset a slight miss on quarterly profit. The 43,000 new video subscribers topped estimates of a gain of 1,600 customers, according to StreetAccount. In the third quarter it lost 129,000 video subscribers.
"Cable's operating metrics improved across video, high-speed Internet and voice for both the fourth quarter and full year," Chief Executive Officer Brian Roberts said in a statement.
Comcast, like its smaller rivals, is increasingly relying on Internet customers for growth as it continues to lose cable TV subscribers to competitors and grapples with rising programming costs.
The company is considering boosting its cable subscriber base on the U.S. East Coast and has been in talks with Charter Communications to carve up Time Warner Cable's cable systems, a source has told Reuters.
Comcast added 397,000 high-speed Internet customers, topping estimates of a gain of 350,000 customers.
Comcast, which also owns NBC Universal, increased its dividend by 15 percent to 90 cents per share annually, authorized a new $7.5 billion stock repurchase program and said it would buy back $3 billion in stock this year.
Free cash flow fell 22 percent to $1.4 billion in the quarter, compared with a year ago, due to higher capital expenditures and working capital.
Comcast recorded fourth-quarter net income of $1.91 billion, or 72 cents a share, compared with $1.52 billion, or 56 cents per share, a year ago.
Adjusted for a tax gain, the company's earnings per share were 66 cents per share, which missed analysts' estimates by 2 cents.
Revenue rose 6 percent to $16.92 billion, above estimates of $16.625 billion, according to Thomson Reuters I/B/E/S.
(Read more: Guess who can help Charter win Time Warner Cable?)
Shares in the U.S. cable giant, which also owns CNBC and CNBC.com parent NBC Universal, rose before the opening bell, following the news. (Click here to get the latest quotes for the company.)
Comcast in talks to license technology to Cox
Separately, Comcast is in advanced discussions about licensing its "X1" video operating system to Cox Communications, the third-largest cable operator, according to people familiar with the matter.
Comcast's Roberts said on Jan. 7 that the company is looking to license its latest cloud-based technology to other cable operators. Comcast has been in talks to provide Cox with a "white label" version of the product without using Comcast's Xfinity product name, two sources said.
The sources would not speak on the record because the talks were private.
The X1 technology platform has a search function that combines shows and movies from live TV, library and content from digital video recorders. It also has an interface that is considered to be the most advanced in the cable industry, featuring Internet applications, viewing recommendations and voice control.
The video product being licensed would use Comcast's software, but would be customized to work within Cox's cable system.
Georgia-based Cox Communications is a unit of Cox Enterprises and has 4.5 million video subscribers.
An agreement is not yet final so it was not clear when the two companies would have a deal in place, or how many Cox subscribers would have access to the product.
Representatives for Cox and Comcast declined to comment.
Comcast has invested about $2 billion in building its cloud-based platform, said Brean Capital analyst Todd Mitchell. Licensing its wares and collecting fees from other operators would help generate additional revenue from the investment.
Mitchell said Comcast and Cox could also save money by using the same technology because they could buy products from the same vendors.
John Malone, the chairman of Liberty Media who is driving cable industry consolidation in the United States and Europe, has been calling on Comcast to share its technology with smaller players to help them compete against the satellite and telecommunications industry. Cable companies serve different markets and do not directly compete with one another.